Natural Gas Remains Stuck Near $9.00 As Traders Ignore The Big Rally In Europe

Key Insights

• European natural gas markets jump at the opening as Nord Stream 1 is shut indefinitely. 
• U.S. natural gas markets stay calm and do not react to the huge rally in the European markets. 
• A move below $9.00 will push U.S. natural gas markets towards the support level at $8.80.

U.S. Natural Gas Markets Remain Under Some Pressure At The Start Of The Week

U.S. natural gas markets are trading near the key $9.00 level as traders ignore the huge rally in the European natural gas markets.

On Friday, Russia’s Gazprom announced that Nord Stream 1 would remain closed due to technical problems. Russia blamed sanctions, saying that Siemens Energy must service the turbines as required by the contract.

The decision was a major surprise for the European natural gas markets, which were moving lower as traders expected that the pipeline would be reopened on September 3.

As a result, European natural gas markets gained 30% at today’s opening. However, prices have already started to move lower. Demand for natural gas in Europe is decreasing as some factories have already decided to close, which may ultimately serve as a bearish catalyst.

In the U.S., traders continue to monitor the European natural gas drama. Freeport LNG will not work until late November 2022, so U.S. exports will not increase in the next few months. At the same time, the situation in Europe provides psychological support to U.S. natural gas markets.

Natural Gas Tries To Settle Below The Key $9.00 Level

Natural gas continues its attempts to settle below the support at the $9.00 level. RSI is in the moderate territory, so there is enough room to gain additional downside momentum in case the right catalysts emerge.

If natural gas settles below $9.00, it will head towards the support at $8.80. A move below this support level will open the way to the test of the support at $8.50. In case natural gas manages to settle below $8.50, it will get to the test of the 50 EMA at $8.40.

On the upside, natural gas needs to settle back above $9.00 to have a chance to gain upside momentum in the near term. The next resistance level for natural gas is located at $9.35. If natural gas climbs above this level, it will head towards the resistance at $9.70.

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